The purpose of this research study is to evaluate the safety and effectiveness of Niaspan compared to placebo both alone and in combination with a "statin" (a family of cholesterol medications), in diabetic patients with high cholesterol levels. Niaspan is a drug, which has recently been approved by the Food and Drug Administration for the treatment of high cholesterol. The "statins" are cholesterol lowering medications which the subject may already be taking. Individuals with diabetes have an increased risk for developing cardiovascular complications, such as heart disease. Individuals with diabetes also often have elevated cholesterol levels. This also increases their risk of cardiovascular complications. Past research has shown that careful control of blood sugar levels may not be enough to reduce cardiovascular risk due to diabetes. Research has also shown that lowering cholesterol levels can reduce cardiovascular risk.